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How PSEi member stocks performed — December 29, 2020

Here’s a quick glance at how PSEi stocks fared on Tuesday, December 29, 2020.

Peso to weaken this year as trade recovers

THE PESO could weaken against the greenback in 2021 to push it back to the P50-per-dollar level as global trade gradually recovers amid easing restriction measures.

The local unit closed at P48.023 per dollar on Dec. 29 — the last trading day of 2020 — appreciating by P2.612 from its P50.635 finish on Dec. 27, 2019.

The peso’s stronger finish towards the end of the year was on the back of a narrower trade deficit, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

“Relatively slower recovery in imports that resulted in a narrower trade deficit led to the relatively stronger peso in recent months,” Mr. Ricafort said in a text message.

Data from the Philippine Statistics Authority showed the country’s trade deficit narrowed to $1.777 billion in October from $1.783 billion in September and the $3.573-billion gap logged a year ago amid a decline in inbound shipments.

Aside from falling imports, support from the Bangko Sentral ng Pilipinas (BSP) kept the local unit around the P48-per-dollar level, said UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion.

“The lack of dollar demand has contributed to the peso strength and will likely continue because of the lingering threat of the coronavirus,” Mr. Asuncion said in a text message.

For this week, dollar demand could pick up as firms restock and amid some signs of recovery in economic activity. Mr. Asuncion said this could translate to downward pressure on the peso and gave a forecast range of P48.02 to P48.06 versus the dollar for the week.

Meanwhile, Mr. Ricafort said the market will be on the lookout for key data releases on inflation and manufacturing. For this week, he expects the local unit to move within P47.95 to P48.09 versus the dollar.

Inflation rose by 3.3% in November, quicker than the 2.5% in October due to the impact of recent calamities. A BusinessWorld poll of 13 economists yielded a median estimate of 3.2% for December, with analysts saying the impact of the typhoons on commodity prices have already subsided.

The Philippine Statistics Authority will release December inflation data on Jan. 5.

Throughout the year, market sentiment on the peso will depend on the pace of the pickup in imports as well as developments related to the pandemic and economic recovery prospects.

For 2021, Mr. Ricafort gave a forecast range of P48-P49 versus the dollar while Mr. Asuncion expects the peso to trade within the P48 to P50 level. — L.W.T. Noble

Shares likely to climb on vaccine developments

By Revin Mikhael D. Ochave, Reporter

STOCKS are expected to climb during the first trading week of 2021 as investor sentiment is seen to improve on the developments on coronavirus disease 2019 (COVID-19) vaccines over the holiday break.

The bellwether Philippine Stock Exchange index (PSEi) ended at 7,139.71 on Tuesday, the last trading day of 2020, higher by 17.46 points or 0.24% from the previous trading session.

On a week on week basis, the main index fell 0.9% or 64.67 points, continuing its decline.

Average value turnover fell 13.2% week on week to P9.63 billion, while average net foreign selling eased 99.3% to P10.78 million.

Timson Securities, Inc. Head of Online Trading Darren Blaine T. Pangan said the local bourse may start the first week of trading this year on a good note as investors are projected to welcome recent positive COVID-19 vaccine news.

“To start the New Year, the market may inch up this week as investors reposition on certain issues as they come back from the long weekend,” Mr. Pangan said in a mobile phone message.

Meanwhile, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said the market’s performance will be dictated by news on the new COVID-19 strain.

The Philippines has prohibited the entry of foreign travellers from the United States (US) starting Jan. 3 after the new COVID-19 strain has been detected in the state of Florida.

The travel ban will last until Jan. 15 and covers passengers who have been to the US within 14 days before their arrival to the Philippines.

“Passengers from the US who will arrive before Jan. 3 will be allowed to enter the Philippines, but they must undergo a 14-day quarantine even if they had initially tested negative,” Reuters said.

The US joins the 19 other countries such as Denmark, Ireland, Japan, Australia, France, Germany, and Italy, among others, that were covered by the initial ban implemented by the Philippines on Dec. 29.

Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a mobile phone message that the local bourse may move sideways for the coming week as investors weigh their prospects for 2021.

“However, pandemic worries amplified by the new COVID-19 variant and its spread to other countries may continue to weigh on investor sentiment,” Mr. Tantiagco said.

Timson’s Mr. Pangan said the market’s area of support is seen at 7,000, while 7,300 seems to be the nearest resistance level.

For Mr. Tantiangco, the PSEi is projected to test its 7,150 to 7,200 resistance range.

“The market’s initial support is seen at its 50-day exponential moving average currently at 6,856.79. After this, its next support is seen at the 6,600 level,” Mr. Tantiangco said. — with Reuters

Duterte risks losing focus as elections near

By Gillian M. Cortez, Reporter

PHILIPPINE President Rodrigo R. Duterte risks losing focus on the country’s battle against the coronavirus as preparations for next year’s presidential elections get under way, analysts said.

“This administration is going to find it difficult trying to accomplish anything meaningful and substantial in 2021, as it builds up the war chest for the elections,” said Herman Joseph S. Kraft, an associate professor who heads the University of the Philippines (UP) Political Science department.

“There will be a lot of rhetoric on accomplishments — signed contracts and agreements perhaps — but not a lot on actual accomplishments,” he said in a Viber message.

Kingmaker Mr. Duterte must keep his focus on the pandemic or he might lose political capital and hurt the chances of his anointed presidential candidate.

“Dealing with COVID-19 and its impact on different aspects of Philippine society will be a huge part of how his whole administration will be judged,” Maria Ela L. Atienza, a political science professor from UP, said in an e-mailed reply to questions.

“The pandemic has affected many of the plans and promises of the President that remain unfulfilled,” she pointed out.

Mr. Duterte, who became President in 2016 and is barred by law from running for reelection, has a little more than a year in office. 

Among his landmark programs are his Build, Build, Build infrastructure campaign and a push for a shift to a federal form of government as he tries to give provinces outside Manila, the capital, an equal share in state revenue.

While a coronavirus-induced lockdown halted some road projects last year, the private contractors of the Skyway stage project, a segment of the North Luzon Expressway harbor link and the Tarlac-Pangasinan-La Union Expressway did finish the work last year. Several other road projects are expected to finish this year.

As far as federalism is concerned, proposals for “surgical” changes to the 1987 Constitution were pushed aside by the coronavirus crisis, Ms. Atienza said.

“The pandemic and the ensuing lockdowns have exposed areas long neglected but should have been prioritized by the government all along,” she said.

These include the country’s poor public health system, the lack of labor safeguards, inequality, the vulnerabilities of migrant Filipino workers and state neglect of the agriculture sector, Ms. Atienza said.

Social welfare services and security reforms remain weak and government corruption continues, she pointed out.

Crime and illegal drugs remain rampant and Mr. Duterte’s promise of an independent foreign policy and constitutional reforms have yet to really take shape, she added.

Despite all these, the President would probably keep his popularity, Mr. Kraft said.

“The President has displayed a Reaganesque quality of having teflon-like characteristics,” he said.

“None of the scandals have really stuck, and he has personally retained his popularity even as his administration has suffered from clumsy to outrightly incompetent handling of issues,” he added.

Ms. Atienza noted that while Mr. Duterte was unlikely to fulfill all his campaign promises, he should try to institutionalize mechanisms to make his anointed one  succeed.

“He and his administration should negotiate with allies, supporters and other crucial groups if they want some more laws to be passed and projects to be implemented given the limited time,” she said.

Mr. Kraft said Mr. Duterte’s proper handling of the pandemic could become his legacy. But it could also work against him especially if the government fails to contain a new strain of the coronavirus that was first detected in Britain, he added.

“His problem is that science does not allow him to follow through on the politics,” he said. “This seems to be the story of the Duterte administration and this pandemic — they can’t manipulate the discourse to favor their politics,” he added.

Fewer people getting tested for COVID-19 slows infection rate

THE DEPARTMENT of Health (DoH) reported 891 coronavirus infections on Sunday, bringing the total to 477,807.

The death toll rose by four to 9,257, while recoveries increased by 8,316 to 448,258, it said in a bulletin.

There were 20,292 active cases, 80.9% of which were mild, 8.2% were asymptomatic, 6.7% were critical, 3.6% were severe and 0.58% were moderate.

Davao City reported the highest number of new cases at 65, followed by Rizal at 55, Isabela at 50, Manila at 40 and Quezon City at 37. Eleven laboratories failed to submit their data on Jan. 2, DoH said.

Fewer people being tested during the holidays led to the low case number, it said.

“The DOH reminds the public to be cautious in interpreting these numbers as an increase in cases in the coming weeks is still possible,” it said.

Health authorities said they continue to assess the effects of the holiday season on coronavirus disease 2019 (COVID-19) transmission. “The DOH asks all stakeholders to be vigilant in guarding against complacency in the fight against COVID-19.” The Philippines last week banned foreign travelers from 20 countries where a more infectious strain of the coronavirus has been detected.

The ban initially covered Britain and was expanded on Dec. 29 to include Hong Kong, South Korea, Singapore, Japan, Israel, Lebanon, Canada, South Africa, Switzerland, Italy, Denmark, Spain, Ireland, The Netherlands, Germany, Sweden, Australia, France, and Iceland.

The government extended the ban to the United States on Jan. 1.

Filipino citizens coming from these countries may enter the Philippines, subject to quarantine and testing, according to the presidential palace. The ban will run until Jan. 15.

DoH on Saturday said the Philippine Genome Center  (PGC) had not detected the UK variant in the country and positive specimens of those coming from countries with the new strain would undergo genome sequencing on Monday to check for the new strain. — Vann Marlo M. Villegas

Gov’t looks at wider net for fake products

THE GOVERNMENT may expand the raids of areas selling counterfeit goods, including two commercial centers in San Juan and Manila that authorities failed to monitor amid a coronavirus pandemic.

The Intellectual Property Office of the Philippines is targeting Greenhills Shopping Complex in San Juan Divisoria in the capital, Rowel S. Barba, director general of the Intellectual Property Office of the Philippines (IPOPHL), said in an online interview.

“Enforcement agencies had problems as far as raids are concerned because of limited physical movements,” he said in mixed English and Filipino. “Hopefully we can do something about Divisoria and Greenhills.”

This year’s raids by police and agents of the National Bureau of Investigation (NBI) would depend on information and complaints from brand owners, Mr. Barba said.

The National Committee on Intellectual Property Rights (NCIPR), which includes IPOPHL, seized fake products worth P13.7 billion in the seven months through July 2019. The products included mostly fake brands of cigarette, alcohol, pharmaceutical and personal products. There were also a handful of handbags and wallets.

Greenhills Shopping Center in San Juan was in the United States Trade Representative’s (USTR) 2019 Notorious Markets list. It said vendors in the area sell large volumes of counterfeit goods such as handbags, shoes, clothing, jewelry, electronics and toys.

“The market has been the subject of raids and monitoring by enforcement officials,” it said. “However, sellers have reportedly been able to evade enforcement by moving to new stalls or by discreetly selling illicit goods behind counters and underneath tables.”

“USTR urges the Philippines to enhance and sustain enforcement actions to deter sales of counterfeit goods at this market.”

IPOPHL said online sales of counterfeit and pirated goods surged during the lockdown. — Jenina P. Ibañez

Nationwide round-up (01/03/21)

House leadership stopped plan to probe alleged corrupt officials — Cayetano

PRESIDENT Rodrigo R. Duterte publicly named lawmakers allegedly involved in corruption because the planned legislative investigation on the matter was stopped under the current House leadership, former House speaker Alan Peter S. Cayetano said on Friday. Mr. Duterte earlier presented a list of supposed corrupt members of the House of Representatives that was prepared by the Presidential Anti-Corruption Commission. Mr. Cayetano, who represents Taguig City, said Party-list Rep. Michael T. Defensor and Bulacan Rep. Jonathan Sy-Alvarado planned to hold public hearings on the alleged involvement of some of their colleagues in corruption before he was removed from the speakership post. “Before Mike Defensor and Jonathan Alvarado were removed from being committee chairmen, those were set to be investigated. The new House leadership prevented that from happening. It said, ‘don’t investigate them just yet,’” Mr. Cayetano, who was ousted as House Speaker in October in a session held outside the chamber, said in his Facebook live in mixed English and Filipino. The lawmaker said the President’s action was consistent with his style of taking matters “into his own hands” once an agency failed to act on his “warning shot.” Mr. Defensor and Mr. Sy-Alvarado were both stripped of their chairmanships in the committee on public accounts, and the committee on good government and public accountability, respectively, following Mr. Velasco’s assumption as Speaker. “I expect more names to be named because there are a lot of names circulating. I’m just disappointed that the President revealed it first,” Mr. Cayetano said, adding that the revelation should prompt the House leadership to act on the corruption claims against its members.

NOT AWARE
Reacting to the lawmaker’s statement, Party-list Rep. Eric G. Yap, one of those tagged in the list, said he’s not aware that an investigation had been planned in the House. Mr. Yap, chairman of the House committee on appropriations, assumed his post under the leadership of Mr. Cayetano. “I’m not aware of that,” he told BusinessWorld in a Viber call on Sunday. “Should an investigation have been filed, I’m sure that it would be pursued by the House committee on good government.” Mr. Yap said his colleagues in the chamber will seek an inquiry into the issue this month. Mr. Velasco has yet to respond to a request for comment as of this writing. — Kyle Aristophere T. Atienza

Regional Updates (01/03/21)

New Pasig BOSS

THE PASIG City government launched another Business One Stop Shop (BOSS) on Sunday, located at the Ayala the 30th Mall, in time for this month’s peak period for business permit renewals. Pasig Mayor Vico N. Sotto, in a post on his Facebook page, said the new facility will decongest the BOSS at the city hall, bring services closer to the businesses that provide the biggest bulk of our city’s local income, and improve the overall ease of doing business. He noted that almost 35% of businesses in the city are based in just two out of the 30 barangays.

Boracay rehabilitation to be completed by May, vows DENR chief

ENVIRONMENT Secretary Roy A. Cimatu said the rehabilitation of the popular tourist island Boracay will be completed by May. “The BIATF (Boracay Inter-agency Task Force) is capping 2020 on a high note, setting us off in 2021 with solid confidence that we will hit our targets within the remaining five months ahead of us,” Mr. Cimatu, who chairs the task force, was quoted in a statement released on December 30. The BIATF’s year-end report showed that the number of structures violating easement rules has gone down to 342, which is 21 % of the 1,569 identified illegal structures around the island. Earlier, the government charged nine establishments for illegally occupying protected forest lands. In 2018, President Rodrigo R. Duterte called the country’s top tourist destination a “cesspool” and ordered its full closure to visitors for over half a year to give way to rehabilitation. In 2020, Boracay was one of the first areas in the country to reopen to domestic tourists following strict lockdowns due to the coronavirus pandemic. — Angelica Y. Yang

China-funded Davao City bridge targeted to start construction in Q3

DPWH-11

CONSTRUCTION of the China-funded Bucana Bridge in Davao City is targeted to start in the third quarter, according to a Department of Public Works and Highways (DPWH) official. “The agreement signed (December 9) was the implementation arrangement for the Bucana Bridge in the coastal road network of Davao City that will be funded through grant by China,” said DPWH Undersecretary Emil K. Sadain through Viber. Mr. Sadain said the Chinese government will provide approximately $60 million or about P2.9 billion financing for the project. The bridge is part of the P19.8-billion Davao Coastal Road project, which complements the Davao City Bypass Road and Davao City Expressway. “The implementation of the project would be on the third quarter (Q3) of 2021,” Mr. Sadain. The bridge, to be located at the mouth of the Davao River, will have four lanes and will be 477 meters long. A statement from the Chinese Embassy indicates that the project will adopt the localized implementation mode, which means the Philippine government will be in charge of technical works and project management. The implementation period is around 30 months, including design and construction phases. — Maya M. Padillo

DENR starts reviving mangrove trees along a portion of Manila Bay

THE ENVIRONMENT department has started planting nilad trees at the Baseco lagoon to revive the mangrove species along Manila Bay, the agency announced last week. “Nowadays, we can hardly find nilad growing in this place.  We lost nilad in Manila primarily because of massive urbanization,” Environment Secretary Roy A. Cimatu said as he led the ceremonial mangrove planting activity on December 29. “This is what we hope to relive in Manila to allow this generation and the future ones to also experience the beauty and bounty of the bay,” he added. The Department of Environment and Natural Resources (DENR), in a statement, said mangroves such as the nilad could successfully capture carbon up to five times better than forests in the mountains. An abundance of mangrove trees in an area can also protect coastal communities from storm surges. The mangrove planting project, titled Nilad for Maynila, is spearheaded by the DENR’s research arm, the Ecosystems Research and Development Bureau (ERDB). The project is part of the ERDB’s contribution to the ongoing Manila Bay rehabilitation program of Manila Bay, ERDB Director Henry Adornado said in a statement.

NOT DELAYED
The DENR also reported last week that the Manila Bay cleanup was not delayed by the public health emergency as various activities and projects lined up last year were implemented. Among these were the launch of a solar-powered treatment sewage plant in July, regular clean-up activities, and provision of portable toilets to informal settlers living along the bay. — Angelica Y. Yang

Health department investigates diarrhea outbreak in Davao Occidental town

THE DEPARTMENT of Health’s (DoH) Davao regional office is investigating an outbreak of diarrhea in a Davao Occidental town that reportedly claimed one life and sickened 33 others. In a statement on Sunday, Annabelle P. Yumang, DoH Davao Center for Health Development regional director, confirmed reports of diarrheal disease cases in Barangay Butuan in the town of Jose Abad Santos after verifying with Municipal Mayor Jason John Joyce early Sunday. Initial investigation showed that 34 patients were admitted to the Tomas Lachica District Hospital, one of whom died and the cause of death is still subject for further investigation. Another 25 individuals are being closely monitored in the community, the DoH said. Municipal Health Officer Amparo A. Lachicha said the probable source of infection is contaminated water from the community’s source. “A team from the RESU (Regional Epidemiology Surveillance Unit) is set to visit the affected barangay to collect appropriate specimens and continue the investigation together with the Provincial Health Office and Municipal Health Office,” the DoH-Davao said. It added that the mayor assured the regional director that “everything is under control” and no new patients were reported on Saturday night. The DoH said medicines and intravenous fluids were provided to the hospital while jerry cans for water storage and chlorine granules were also delivered to the community. The DoH also reminded the public that safe drinking water, use of improved sanitation, and hand washing with soap can reduce the risk of diarrhea. “If anyone is experiencing three or more loose or liquid stools per day, this must be reported immediately to the nearest facility for immediate health interventions,” it said. — Vann Marlo M. Villegas

Sin tax collection target set at P297.8 billion in 2021, DoF says

THE GOVERNMENT has set a target of P297.8 billion for excise taxes collected on so-called “sin” products this year, driven by higher tax rates, which will offset the expected slump in volumes due to the economic hardship caused by the pandemic, the Department of Finance said.

The target was adopted by the Development Budget Coordination Committee during its 187th meeting in December, Finance Assistant Secretary Ma. Teresa S. Habitan told BusinessWorld via Viber last month.

This year’s target was 29% bigger than the downgraded P230-billion goal for 2020, and the P269.1 billion collected in 2019, by 11%. However, this was 10% lower compared to last year’s original goal of P332.2 billion, before economic managers slashed their revenue projections to consider the impact of the pandemic on consumption.

Ms. Habitan said the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC) are expected to collect P177 billion from excise taxes on tobacco products, P81.6 billion from alcoholic beverages, P39 billion from sweetened beverages and P200 million from electronic cigarettes (e-cigarettes).

Excise tax rates on “sin” products have been increased again this year as per the timetable set out in law, with Ms. Habitan noting that sales volumes will be lower in line with the economic slowdown, weighing on projected revenue.

Republic Act (RA) 11346, signed in July 2019, increases the tax imposed on cigarettes to P50 per pack in 2021 from P45 last year.

RA 11467, which was signed into law at the start of 2020, increased the excise tax on heated tobacco products to P27.50 per pack this year from P25 last year.

Vapor products with nicotine salt will be levied a P42 tax per milliliter, up P5 from the 2020 rate.

Tax rates on conventional freebase or classic nicotine vapor products will also increase to P50 per ten milliliters from P45 previously.

RA 11467 also calls for a tax hike for alcohol products, increasing the specific tax of distilled spirits to P47 per proof liter starting 2021 from P66 previously, while keeping the ad valorem tax at 22% of net retail price.

Fermented liquors will also be taxed at P37 per liter, up from P35 last year.

The BIR and BoC collected P212.94 billion in the 10 months to October, exceeding the target by 16.88% but still behind the year-earlier pace by 6.7%.

Tobacco collections fell 3% from a year earlier to P129 billion, while those from alcohol products fell 8% to P57.37 billion. Collections from sweetened beverages fell 19% to P29.56 billion.

Tax collections from these products exceeded the overall target for the period by around 17%. — Beatrice M. Laforga

DoE studying RE, hydrogen, nuclear as alternatives to conventional fuels

ENERGY DEPARTMENT Spokesman Felix William B. Fuentebella said the agency is looking into adding more renewable energy (RE), nuclear, and hydrogen-based power in preparation for any possible supply crunch in conventional fuels.

“We are coming up with more options… We have to look into RE and the other fuels that are emerging such as hydrogen and the nuclear technology,” he said at the Department of Energy’s (DoE) year-end videoconference last week.

“There’s a possibility that conventional fuel can be (depleted)… Hindi lang national, pati international. (Not just on a national level, but international),” he added.

Mr. Fuentebella was responding to a question on whether oil and coal-fired generators will eventually be supplanted by RE.

He said the DoE is studying how RE can be connected to the grid and distribution system.

“Although meron tayong sufficient renewable energy sources, kailangan ikabit natin sa grid… ‘yung pagde-deliver natin ng continuous service 24/7 (Although we have sufficient renewable energy sources, we need to connect them to the grid… in a way that ensures 24/7 services). So these are very technical issues; that is why the DoE is (studying the issue more broadly),” he said.

Mr. Fuentebella also cited the need for further studies into nuclear and hydrogen power — both energy sources which were earlier endorsed by Energy Secretary Alfonso G. Cusi.

In December, Mr. Cusi said that the nuclear energy program inter-agency committee has submitted its recommendations to President Rodrigo R. Duterte. He said that the group “positively expected” that nuclear would be included in the country’s power mix.

Five months earlier, the President ordered the creation of the inter-agency body which was tasked to conduct a study on adopting a national position on a nuclear energy program.

In December, Mr. Cusi also announced that the department is looking into the viability of harnessing power from hydrogen.

“I have recently formed a team to study its potential for the local industry given that hydrogen is seen as the fuel of the future,” Mr. Cusi said in his message at the DoE’s virtual celebration of National Energy Consciousness Month.

In October, the DoE issued a ban on new coal-fired projects after its recent assessment showed the need to shift to a more flexible power supply mix. — Angelica Y. Yang

DTI says success of pitch to investors hinges on CREATE passage

THE Trade department said the passage of a key tax reform bill, known as the Corporate Recovery and Tax Incentives for Enterprises (CREATE), forms a major part of its investment promotion message.

Trade Undersecretary Ceferino S. Rodolfo in an online briefing last month said that he is hoping for uncertainties over CREATE to be resolved in January, in time for companies to reap the retroactive benefits of the bill by the income tax deadline in April.

“Sana lang mabilis. Kasi actually pino-promote na natin ‘yung CREATE eh. (I hope for a speedy passage because we are promoting CREATE to investors) Sinasabi na lang natin sa mga investors (We are telling investors) that we believe that the CREATE bill as passed by the Senate will be the baseline in terms of incentives,” he said.

Legislators will go into a bicameral conference committee to reconcile clashing provisions in the two chambers’ bills. The Senate passed its bill in November, while the House approved its version in 2019.

The Senate bill reduces corporate income tax to 25% from 30% starting July 2020, and then by one percentage point each year between 2023 and 2027. The rate falls to 20% for domestic companies with net taxable income of P5 million or lower and total assets less than P100 million.

CREATE also streamlines the tax incentives system to make it more time-bound and performance-based.

“By February siguro ‘yan, March, nagpre-prepare na ng mga income tax applications ‘yung mga kumpanya (Companies will be preparing their tax returns by February or March)… ‘yun ‘yung window (that’s the window) not just for those with incentives but in general for all establishments,” Mr. Rodolfo said.

Mr. Rodolfo hopes that the provisions on incentives in CREATE, which he said balance the ability to attract investment and generate fiscal revenues, will be carried forward in the bicameral process.

“We trust the legislative wisdom of both houses to merge, consolidate, work on the whatever provisions of CREATE and CITIRA they deemed divergent,” he said, referring to a previous incarnation of the tax reform bill, the proposed Corporate Income Tax and Incentives Rationalization Act. CITIRA was repositioned as an economic recovery measure, CREATE, following the damage done to the economy by the pandemic.

The Finance department has said that CREATE will cost the government P250 billion in foregone revenue over the next two years after the corporate income tax cut was accelerated for small businesses. — Jenina P. Ibañez

Philippines to receive assistance from India in setting up National ID, broadband systems

INDIA has pledged aid to the Philippines as it sets up its national ID system, and also promised assistance in organizing a broadband network to fast-track its digital transformation, the Department of Finance (DoF) said.

In a statement over the weekend, the DoF said Indian Ambassador Shambhu S. Kumaran put forward the offers at a recent virtual meeting with Finance Secretary Carlos G. Dominguez III.

The national ID system program and the development of the broadband network are expected to support broader use of financial technology (fintech) and widen financial inclusion.

India launched a pioneering national ID system in 2009 known as Adhaar, which provided a unique 12-digit identifier to each of the country’s citizens across a population more than 1 billion strong.

Mr. Dominguez also told Mr. Kumaran that Indian private companies can participate in the government’s plan to improve cyber security at government banks and their subsidiaries.

The national ID system seeks to provide a single identification card to all Filipinos and reduce dependence on multiple government-issued IDs. The broadband network hopes to boost adoption of fiber optic networks and wireless technology, while allowing smaller telecommunication companies to enter the market.

Mr. Kumaran was quoted as saying that Indian firms are also seeking to participate more in the country’s “Build, Build, Build” infrastructure program.

The two sides will discuss more possible project partnerships, according to the DoF.

Mr. Dominguez said India’s GMR Infrastructure Ltd. is already involved in infrastructure projects like the Mactan Cebu International Airport project and expansion of the Clark International Airport.

President Rodrigo R. Duterte made official visits to India in 2017 and 2018, and Indian President Ram Nath Kovind paid a state visit to the Philippines in 2019. — Beatrice M. Laforga

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